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Daily Column
Arab Papers Wed: Oil Auction a Failure!
Shahrastani Faces an Uncertain Fate, Dozens of Iraqis Killed in Kirkuk
By AMER MOHSEN 06/30/2009 5:11 PM ET
Note from the author: After two and a half years of reporting on the Iraqi and Arab media for the readers of Iraq Slogger, this experience has come to a close. It has been an honor and a pleasure, and I hope that my daily column has been of help to our faithful readers. I also hope that, one day not too far, good news will finally start emanating from Iraq, this fascinating country that has been tormented beyond belief. Please stay in touch:

Iraqi papers are out today due to the national holiday announced for the occasion of US withdrawal from Iraqi cities and urban centers. However, the day that Maliki described as “a great victory,” calling for Iraqis “to be joyous” and celebrate, has been marred by dozens of victims who fell in a massive explosion in Kirkuk.

Al-Jazeera reports that at least 32 Iraqis were killed in the northern city when a car exploded in a busy market. According to the local correspondent of the news channel, the incident took place in a mixed area containing both Kurds and Arabs, and that the number of casualties is likely to rise as the search for victims continues.

Also on the day of US withdrawal, al-Jazeera reports that four US soldiers were killed in Baghdad in clashes. But the US Army has refused – so far – to reveal the circumstances of their death, contenting to state that an investigation into the incident is ongoing.

Another important piece of news pertains to the auction of Iraqi oil fields that began today in Baghdad, live on national television. Arab and international media agencies are reporting very bad news for the Oil Minister Husain al-Shahrastani: the auction was a failure.

According to early reports, the first day of the event (which will continue through tomorrow) did not witness the amount of interest and competition that was expected of the energy giants that attended and bid on several Iraqi oil and gas fields.

Only the Rumaila oil field in the south (the largest on offer) was successfully contracted to British Petroleum, which acceded to the government offer of $2 per barrel produced (above a minimum limit and over 20 years.) Some of the other fields did not receive any offers; and as for the rest, companies were unwilling to match the prices set by the government. In fact, the only bids that were made in some cases exceeded the price limit by several folds – companies cited security threats among others as factors that significantly raise the commercial risk of investing in Iraqi oil.

This uncertain beginning for the first round of oil contracts will put al-Shahrastani in a real bind. The Oil Minister – whose person is already opposed by powerful political forces – has been accused of mismanaging Iraq’s oil wealth and of failing to raise the levels of production. Al-Shahrastani used to point to the upcoming round as the cornerstone of his plan to expand output and investment. Critics will now point out that the Minister’s decision to refrain from offering smaller service contracts (that could have significantly improved the performance of existing fields) in favor of packaged, long-term, contracts was not a wise one. Comparisons will no doubt be made between the fate of Iraq’s largest oil fields – which still remain untapped – and the smaller oil fields of Kurdistan (such as Taq Taq and Tawqe) that have already begun production (through foreign contracts that were fiercely opposed by the Minister. )

In other news, pan-Arab al-Sharq al-Awsat published a report on the pro-US Sahwa militias, who stand to lose the most from the US withdrawal from Iraqi cities. As US patrols stop roaming Iraqi streets, Sahwa leaders exclaim: “we could pay a heavy price.” The Sunni militias find themselves now in direct contact with their nemesis, al-Qa'ida, which has vowed to wage an unrelenting war against these “collaborators.” Sahwa members told the paper that they felt confident near US units, knowing that al-Qa'ida would not dare wage attacks against them, “they knew who was the strongest,” an assurance that is now largely gone with the US Army concentrating its forces in five bases outside the major cities.

Other Sahwa fighters expressed fears that Shi'a militias will also “return” to target them. Worse yet, the Sunni militias face an uncertain fate with the Iraqi government that is now responsible for their equipment and salaries, and which views them with extreme suspicion. A Sahwa fighter standing at a checkpoint gazed at his antique machine gun and exclaimed: “if the terrorists return, they will surely kill us, how do you expect us to defend ourselves with this?”


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